NATIONAL AFFAIRS: Mark Latham caves in on free trade deal

Well over half of the 25 seats that will decide which party will run Australia for the next three years are regional electorates to be won or lost with a swing of less than 3 per cent.

The seats - mainly in Queensland, New South Wales and Victoria - are all among the lowest income areas in the country and have been impoverished by the blowtorch of the heartless and irrational economic policies of governments of the past 20 years.

This makes it even more surprising that Mark Latham chose to ignore political imperatives and back John Howard's historic free-trade deal with the most powerful economic nation the world has seen.

The intensity of the final negotiations and the necessity of "striking a deal" between the major parties also indicates again a fundamental divide between the political debate in Canberra and real-world political views of ordinary Australians.

Missed opportunity

The bottom line of the deal was that, despite the kudos over the Pharmaceutical Benefits Scheme, Latham missed an opportunity to nail Howard.

Indeed, given the latest polls - which show Labor still slightly ahead of the Coalition going into the start of the campaign - a decision to stand up against the deal would have almost certainly guaranteed him victory.

Traditionally, for any Opposition to seize government they need a comfortable lead going into the campaign because the incumbent invariably pegs back a few percentage points.

Even Paul Keating managed to drag back voters in the 1996 election when Labor was routed.

But Latham made the undeniably calculated step of sacrificing political gain for the imperatives of conventional economics - the Treasury line. In doing so he has not only ignored the plight of the regions but also had to take a hit from the union movement and a considerable swathe of his backbench who also opposed the deal.

Latham's original political instincts in opposing the deal were correct, and for several weeks it appeared he was going to stand up for Australian agriculture, industry and jobs.

But a combination of nervous colleagues, who invariably go for the safer line, and being spooked by accusations that he was somehow anti-American, Latham slowly wound back the rhetoric.

When the Labor-backed Senate Committee came out in favour of the deal (with reservations) Latham had his excuse to sign his name to the agreement. Certainly, Latham played clever politics by forcing John Howard to make a concession on the political touchstone issue of the Pharmaceutical Benefits Scheme.

The Prime Minister should have immediately accepted Latham's spurious amendment to make the PBS more resistant to the US multinationals, but either through stubbornness or bad advice, allowed Latham several days of free publicity and the credit of improving on the deal.

Mr Howard, who despises socialism more than most, even conceded that the PBS was untouchable: "Why would any Prime Minister of any political stripe in Australia in his right mind agree to something that would weaken the Pharmaceutical Benefits Scheme?"

Unnecessary

So he eventually agreed to the Latham amendments even though he thought they were both "unnecessary and a smokescreen" and could give the Americans an excuse for walking away from the deal.

But, however important the unique Australian drug system was, the PBS was never the real issue.

Despite all the headlines and apparent political imperatives in Canberra about reaching a deal, among the populace there was never any enthusiasm about giving the enormous might of the US open-slather access to Australian markets.

In fact, there remains enormous scepticism about a deal which initially claimed billions in benefits for Australia, but which shrank to just $53-odd million when it was finally agreed to by the Australian Parliament. John Howard appears to be losing some of his renowned political touch over recent weeks.

However, month-by-month Latham too is being exposed for giving all the appearances of a strong nationalist and old-fashioned working class Laborite, but contradicting all his words when he actually has to make a serious policy decision.